Our green hi-tech future can only be driven by science
EVEN when the economy is booming and tax revenue is soaring, no Chancellor is ever going to satisfy everyone with his spending decisions. That will be truer than ever tomorrow, when Rishi Sunak’s Budget will set the framework for the economy as we learn to live with Covid, and somehow try to balance the need to start restoring public finances with the need to make sure the economy grows fast enough to do so.
If you want to play Budget Bingo, I’d bet my mortgage on Mr Sunak telling us that “this is a Budget for growth”. But what does that actually mean?
We constantly hear from the Government about “levelling up” as the foundation of its policies, which will lead to economic growth.
But there is another vital element to that which has had far less attention. Boris Johnson wrote in June about how the UK should “regain its status as a science superpower, and in so doing to level up”.
It was – is – an ambitious but critical idea: that the niche we should occupy as a country, as we look to our post-Brexit future, should be as a global leader in Research & Development.
As the Prime Minister put it: “The UK has so many of the necessary ingredients: the academic base, a culture of innovation, the amazing data resource of the NHS, the capital markets.”
TO be blunt, we need something to drive the high-wage, high-skilled, hi-tech, green economy almost everyone agrees is the way forward, and that something is our science base and our culture of R&D.
Our scientists’ response to the pandemic could hardly have been a better illustration of our strength, bringing together a UK-based, global pharmaceutical company, AstraZeneca, with a world-leading university research facility at Oxford.
And the new UK Vaccines Manufacturing and Innovation Centre, funded by £196million of taxpayer money, is a model of its kind, a university-industry collaboration which will cement our work in that field.
Key to this emphasis on our R&D-led future was intended to be a rise in taxpayer investment from the current £14.9billion to £22billion in 2024-25 to act as a magnet for necessary private sector investment.
Under plans set out this summer, it was due to raise total UK spending on R&D from 1.7 to 2.4 per cent of GDP by 2027.
In July, the Government spelled out an innovation strategy of “technology families where the UK can develop strategic advantage” in areas such as advanced materials and manufacturing, artificial intelligence, digital and advanced computing, genomics, engineering biology, electronics, energy and environment technologies and robotics and smart machines.
It’s important to remember this is not 1970s-style “picking winners”. Rather, it is a response to the realisation that serious economic growth depends on our scientific skills and the investment and productivity these will bring, with the Government oiling the wheels to help lure private investment.
Even taxpayer spending of £22billion a year would only bring the R&D share of GDP to the average level for industrialised countries. If we are to be a science superpower, that is the most basic amount needed.
But vital as this spending is, leaks over the past week suggest that when he comes to present his Budget, Mr Sunak will not, after all, commit to the plan. According to one authoritative report, “A person with knowledge of internal Treasury discussions said the 2024 target would be ‘dropped’, amid scepticism in the department that increasing research spending to £22billion would deliver promised economic benefits.”
A statement last week reaffirmed commitment to increasing R&D expenditure to £22billion “to secure the UK’s future as a global science superpower” but left out any mention of the 2024 target.
This would be a disaster.
ONLY this month the Prime Minister spoke of us as a high-productivity, high-wage economy. But where is that productivity and those wages coming from? It has to be from innovation, science, R&D and the investment they will bring.
As one former government adviser put it: “If the Government gives up on its R&D investment plans, it is hard not to conclude that it has basically given up on economic growth.”
Mr Sunak faces a near impossible balancing act tomorrow. He has so far been exemplary, and it is clear his instincts are spot on, marrying principle with common sense and flexibility.
But it will send a worrying sign if, just months after the Prime Minister made a sensible commitment to science and R&D spending, the Chancellor walks away from it.
‘Our scientists’ response to the pandemic illustrates our strength’